SPX Daily Chart Fibonacci Retracements from 8-22-11 Bottom

This chart shows the crash profile from late July to the 8/22/11 bottom. Projecting the Fibonacci retracements for this drop from 1348 to 1100 shows how price struggled at the 50% Fib retracement at 1224-ish, which is also important resistance from Fall 2010. Watch the 38% Fib level as support at 1194-ish in the days ahead. Note the higher high in price from about 8/15/11 thru 9/1/11 (greeen line). This price high occurs with all indicators showing a long and strong profile, no negative divergence. Thus, another higher high in price, above 1225-1230, would actually be expected in the days ahead, despite the bearish drop 9/1/11.

So we may be in for a little Kabuki theatre over the next few days as price continues to sort out direction. Price respects the 20 MA as support/resistance so watch the 1173-1194 area as the bounce point, if not sooner, then perhaps a higher high towards the 1230's or higher. Just take it a day at a time for now, however. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your financial advisor before making any investment decision.